STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
THE FLORIDA HORSEMEN'S BENEVOLENT AND PROTECTIVE ASSOCIATION, INC.,
Petitioner,
vs.
CALDER RACE COURSE, INC.; AND DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF PARI-MUTUEL WAGERING,
Respondents.
/
Case No. 18-4997
RECOMMENDED ORDER
This case came before Administrative Law Judge John G. Van Laningham for final hearing on January 7 and 10, 2019, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Bradford J. Beilly, Esquire
Beilly and Strohsahl, P.A. 1144 Southeast Third Avenue
Fort Lauderdale, Florida 33316-1110
For Respondent Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering:
James A. Lewis, Esquire Louis Trombetta, Esquire Department of Business and
Professional Regulation 2601 Blair Stone Road
Tallahassee, Florida 32399-2022
For Respondent Calder Race Course, Inc.:
Wilbur E. Brewton, Esquire Kelly Brewton Plante, Esquire Brewton Plante, P.A.
215 South Monroe Street, Suite 825 Tallahassee, Florida 32301-1856
STATEMENT OF THE ISSUE
The issue in this case is whether Respondent should approve the renewal of a licensee's annual slot machine gaming license, where, according to Petitioner, the licensee's slot machine gaming area is not "contiguous and connected to" its pari-mutuel facility's "live gaming facility" for wagering on horse races—— if a live gaming facility even exists at the track——and therefore fails to conform to statutory requirements.
PRELIMINARY STATEMENT
On July 9, 2018, Respondent Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, approved the application of Respondent Calder Race Course, Inc., for renewal of its License for Slot Machine Operations, by issuing a renewal license which authorizes the holder to conduct slot machine gaming at its pari-mutuel facility in Miami Gardens, Florida, from July 10, 2018, to July 9, 2019. The renewal license states that "[i]t has been found that Calder Casino and Race Course has fulfilled all the statutorily required conditions for licensure and is therefore qualified to
hold a license to conduct Slot Machine Gaming as authorized under the Laws of Florida."
Thereafter, Petitioner Florida Horsemen's Benevolent and Protective Association, Inc., which had not received notice of the agency's intended action on the licensee's renewal application, filed a Petition for Formal Administrative Hearing Involving Disputed Issues of Material Fact, wherein it alleged that the slot machine licensee does not, in fact, fulfill all of the statutorily required conditions for licensure, and therefore should not have received a renewal license for fiscal year
2018-19. Specifically, Petitioner averred that the licensee's slot machine gaming area is not located in a building that is "contiguous and connected to" its "live gaming facility," which, if true, would constitute a violation of section 551.114(4), Florida Statutes.
On September 18, 2018, the agency referred the matter to the Division of Administrative Hearings ("DOAH"), where an Administrative Law Judge ("ALJ") was assigned to conduct a formal hearing. The original hearing date of November 20, 2018, was continued, at Respondents' unopposed request, to January 7, 2019, and the final hearing began on that date, in accordance with the Order Granting Continuance and Rescheduling Hearing by Video Teleconference dated November 14, 2018. Because the
hearing was not completed in one day, the proceeding resumed, and concluded, on January 10, 2019.
Petitioner called the following witnesses: Carolynn Tarbue, Robert Ehrhardt, David Roberts, Jamie Pouncey, and Stephen Screnci. Petitioner's Exhibits 1 through 3, 7 through
17, 20, 21, 24, and 25 were received in evidence, while official
recognition was taken of Petitioner's Exhibits 5, 6, 18, 19, and 22. The licensee, Calder Race Course, Inc., offered one witness, Jason Stoess, and Calder Exhibits 1 through 8 were admitted as well. The agency presented two witnesses, Noel Haynes and Brad Jones, and introduced Division Exhibits 1 through 7, all received.
Transcription errors delayed the filing of a complete and relatively clean final hearing transcript until March 19, 2019, and, at the parties' multiple, unopposed requests, the deadline for filing proposed recommended orders was postponed and extended, ultimately to April 15, 2019. Each party timely filed a Proposed Recommended Order on that date.
Unless otherwise indicated, citations to the official statute law of the state of Florida refer to Florida Statutes 2018.
FINDINGS OF FACT
Parties
Petitioner Florida Horsemen's Benevolent and Protective Association, Inc. ("FHBPA"), is a Florida nonprofit corporation whose members include hundreds of Florida licensed horse trainers and thousands of Florida licensed horse owners. FHBPA exists to promote horse racing in the state of Florida and to represent the interests of its members in dealing with the public, the legislature, state regulators, and the tracks.
Respondent Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering ("DPMW"), is the state agency responsible for implementing and enforcing Florida's pari-mutuel laws. Its duties include the licensing and regulation of all pari-mutuel activities in Florida.
Respondent Calder Race Course, Inc. ("Calder"), is the holder of a pari-mutuel wagering permit. As a permitholder, Calder must apply for an annual license to conduct pari-mutuel operations. See § 550.0115, Fla. Stat. This annual license gives the permitholder authority to conduct the pari-mutuel wagering activity authorized under its permit on the dates identified in the license.1/ At all times relevant to this case, Calder has held a license to conduct thoroughbred horseracing performances.
In addition to its license to conduct pari-mutuel operations, Calder has held, at all times relevant hereto, a license to conduct slot machine gaming.
Events Leading to the Instant Dispute
In July 2009, Calder applied for and received a slot machine license, in accordance with the provisions of section 23, article X of the Florida Constitution, and sections 551.101 and 551.102(4). As a condition of initial licensure, Calder needed to demonstrate its compliance with chapters 551 and, as applicable, chapter 550, Florida Statutes. § 551.104(4), Fla. Stat. A slot machine license must be renewed annually. "[T]o maintain continued authority for the conduct of slot machine gaming," a slot machine licensee must, as a condition of renewal, and at all times, "[c]ontinue to be in compliance with" chapter 551; "[c]ontinue to be in compliance with chapter 550, where applicable[;] and maintain [its] pari-mutuel permit and license in good standing pursuant to the provisions of chapter 550." Id.
A slot machine licensee must have a designated slot machine gaming area ("SMGA") where "slot machine gaming may be conducted in accordance with the provisions of" chapter 551.
§§ 551.102(2), 551.114, Fla. Stat. Section 551.114(4), which is at the center of the current controversy, specifies where the licensee is allowed to locate its SMGA:
Designated slot machine gaming areas may be located within the current live gaming facility or in an existing building that must be contiguous and connected to the live gaming facility. If a designated slot machine gaming area is to be located in a building that is to be constructed, that new building must be contiguous and connected to the live gaming facility.
From the outset, Calder intended not to place its SMGA within the current live gaming facility ("LGF") at its track, but in a new casino, to be constructed for the purpose of serving as its slot machine building ("SMB"). Opened in 2010, Calder's casino was nearby its racetrack and grandstand facility. The grandstand, with a large seating area for spectators, was part of a 450,000 square foot building. When the casino first opened its doors, this grandstand building was Calder's LGF.
Calder's SMB (the casino), when built, was not "contiguous" to the current LGF (the grandstand) under any ordinary understanding of the word "contiguous," which clearly denotes actual contact——touching. Nor was the SMB directly "connected to" the LGF in accord with the image that most readily comes to mind when thinking about how two contiguous structures would be connected to each other, for in that image some physical element of one structure is linked or joined to some physical element of the other, which latter shares a common boundary with the former, being contiguous thereto. This departure from the plain meaning section 551.114(4) resulted from DPMW's decision to
give licensees "leeway" in satisfying the strict statutory requirement that an SMB, if used as the location for the SMGA, be "contiguous and connected to" the current LGF (the "CCT Requirement").
DPMW first relaxed the CCT Requirement for Pompano Park, a standardbred harness racetrack in Pompano Beach, Florida. A few years before Calder obtained its slot machine license, Pompano Park had acquired one. Pompano Park had wanted to place its SMGA in a new SMB, just as Calder later would do, and sought DPMW's guidance regarding compliance with the CCT Requirement. DPMW informed Pompano Park that the agency would be satisfied if the two buildings were "connected" by a covered walkway (rather than to each other). So, Pompano Park "connected" its newly constructed SMB to its then current LGF (a grandstand) by a sidewalk, and DPMW approved the configuration by issuing, and renewing, Pompano Park's slot machine license.
In 2009, Calder wanted the same deal for its SMB. DPMW had no real choice but to go along. Having previously construed the CCT Requirement as demanding no more than a connecting sidewalk between the SMB and the LGF, DPMW had formulated an interpretive statement regarding section 551.114(4) for Pompano Park so broadly worded as to apply generally to all slot machine licensees. It therefore could have surprised no one when DPMW told Calder that its proposed SMB would be sufficiently
"contiguous and connected to" the existing grandstand if there were a covered walkway between the structures. Calder made it so.
At the time Calder built its casino, FHBPA did not object to DPMW's slots-friendly construction of section 551.114(4), which gave the green light to stand-alone SMBs——and, for that reason, should have flashed a yellow warning signal to the horsemen. Calder's original set-up, however, promised to benefit FHBPA because section 551.104(10)(a) provides that "[n]o slot machine license or renewal thereof shall be issued to an applicant holding a permit under chapter 550 to conduct pari- mutuel wagering meets of thoroughbred racing unless the applicant has on file with [DPMW] a binding written agreement between the applicant and the Florida Horsemen's Benevolent and Protective Association, Inc., governing the payment of purses on live thoroughbred races conducted at the licensee's pari-mutuel facility." Calder, in short, was required to enter into a revenue sharing agreement with FHBPA under which slot machine revenues would be used to supplement the purses paid on the races conducted at Calder's track. As of the final hearing, pursuant to the FHBPA/Calder Supplement Agreement ("Statutory Contract"),2/ FHBPA was collecting (for the benefit of its members) between $8 million and $9 million per year from Calder's slot machine gaming operations.
The interesting thing about section 551.104(10) is that not only does it require Calder, as a slot machine licensee, to have a binding written agreement with FHBPA, as the statutorily designated (by name) thoroughbred horsemen's bargaining agent; but also, FHBPA is forced thereunder to enter into the agreement with Calder. In this regard, section 551.104(10)(c) provides that if the parties are unable timely to reach an agreement, they must submit to "mandatory binding arbitration to resolve the[ir] disagreement," at the conclusion of which "the arbitration panel shall present to the parties a proposed agreement that the majority of the panel believes equitably balances the rights, interests, obligations, and reasonable expectations of the parties." § 551.104(10)(c)3., Fla. Stat. The parties "shall [then] immediately enter into such agreement, which shall satisfy the requirements of [section 551.104(10)](a) and permit issuance of the pending annual slot machine license or renewal." Id. The
statute literally gives FHBPA no choice but to do business with Calder as long as Calder is a slot machine licensee.
If FHBPA had any misgivings about DPMW's interpretation of the CCT Requirement in and around 2010 and during the several years thereafter, the slot machine revenue stream flowing to FHBPA pursuant to the Statutory Contract must have ameliorated them. By allowing Pompano Park and Calder to build freestanding, noncontiguous SMBs, however, DPMW (perhaps unwittingly) had opened
a door that Calder strode through in 2015, when it began tearing down the grandstand complex, a demolition project which was completed in 2016.3/ Calder could do this without in any way affecting the casino/SMB because the SMB was not actually contiguous and connected to the LGF. Had the SMB truly been contiguous and connected to the LGF, Calder could not have demolished the LGF without directly impacting, if not partially tearing down, the SMB. In that event, new construction would have been needed to restore the SMB's integrity and to replace the LGF to which the SMB must be contiguous and connected.4/ As it happened, Calder razed the grandstand, cleared the debris, and built——nothing.
The question naturally arises, therefore, whether Calder currently has a "live gaming facility." FHBPA asserts that Calder lacks a legally sufficient LGF because there is no longer an occupiable structure near the track from within which patrons may watch and place wagers on live horse races. DPMW and Calder disagree with FHBPA. They contend that Calder has a "live viewing area" or "live viewing locations," which include some physical amenities that, taken as a whole, constitute an LGF within the ambit of section 551.114(4).
There are no genuine disputes regarding the material facts surrounding Calder's so-called "live viewing locations." The primary viewing area is located in front of the final stretch
of the racetrack, at a spot called the "apron." There are some outdoor seats and tiki huts on the apron, and, during the race meet, Calder erects a collapsible canopy tent there, which, despite the absence of walls, provides a bit of shelter for wagering machines, video screens, and, of course, patrons, for whom additional outdoor seating is provided.
At the "viewing locations" on and around the apron, patrons can watch and place bets on horse races. Conveniently, walk-around tellers are usually nearby to take wagers from patrons who venture out from the shaded area under the canopy. A food truck is frequently present, too, so patrons might have a trackside dining option.
All of this is only a short distance from the casino, and there is a concrete walkway along the route, so patrons do not need to step on grass or parking lot pavement if they stroll from the SMB to the apron or vice versa. And, although there is no longer a ceiling or other covering protecting the entire length of the sidewalk from the elements, patrons at least do not need to cross a public street, waterway, or similar barrier to get from the SMB to the "live viewing area" on the apron, nor must they leave the confines of Calder's property.
In July 2017, DPMW granted Calder's application for the renewal of its slot machine license, for the fiscal year 2017-18. DPMW took this action knowing that Calder had demolished its
grandstand and being fully aware of the facts relating to Calder's trackside "live viewing area." Behind DPMW's issuance of the renewal license lay its interpretation of section 551.114(4)'s "live gaming facility" nomenclature as including an outdoor "viewing area" such as the apron at Calder's track; and the agency's interpretation of the statute's CCT Requirement, under which the strict original text, "must be contiguous and connected to," becomes the lax, "must be no farther than a short walk from, and connected by a paved pathway that crosses no streets, rivers, or similar barriers, to."
On October 25, 2017, FHBPA filed a Petition Challenging an Agency Statement as a Rule, alleging that DPMW's interpretations of "live gaming facility" and "contiguous and connected to," as manifested by the renewal of Calder's slot machine license, constituted unadopted rules. See Fla. Horsemen's Benevolent & Protective Ass'n v. Dep't of Bus. & Prof'l Reg.,
Case No. 17-5872RU, 2018 Fla. Div. Adm. Hear. LEXIS 654 (Fla.
DOAH Sept. 4, 2018)(the Rule Challenge). FHBPA lost its section 120.56(4), Florida Statutes, challenge to these agency statements at the trial level and did not appeal the ALJ's decision.
DPMW and Calder view their last victory as significant, but the Rule Challenge has no bearing on this case. Whether or
not DPMW's interpretations of section 551.114(4) are rules by
definition, they are not controlling here. If they are unadopted rules, then the undersigned, of course, cannot apply them as authoritative principles in determining any party's substantial interests. See § 120.57(1)(e), Fla. Stat.5/ And if they are not unadopted rules, as was found in the Rule Challenge, then by
definition the interpretive statements do not have the force and effect of law. Simply put, DPMW cannot have nonliability under section 120.56(4) and authoritative statements, too.
At bottom, therefore, DPMW's interpretative statements constitute legal arguments to be evaluated on the same footing as any other party's arguments. In this regard, it is perhaps worth noting that section 120.56(4) neither requires nor authorizes the ALJ to determine whether the alleged unadopted rule is a correct reading of the underlying statute. Accordingly, the ALJ in the Rule Challenge rightly declined to reach that issue. Id. at *37. In this case, by contrast, ascertaining the originally intended meaning of section 551.114(4), so that the legislature's policy respecting SMBs may be carried out, is the whole ballgame.6/
In May 2018, Calder filed an application to renew its slot machine license for 2018-19. On July 9, 2018, DPMW granted Calder's application and issued the renewal license, taking putative final agency action.
Not long thereafter, FHBPA filed a petition requesting a hearing to contest DPMW's issuance of a renewal license to Calder
for fiscal year 2018-19. Regarding the timeliness of FHBPA's petition, it is undisputed that DPMW did not give FHBPA a clear point of entry into an administrative proceeding to determine the correct agency action to take on Calder's license renewal application. Consequently, as will be discussed below, the issuance of Calder's renewal license, despite outward appearances, is not final agency action, as a matter of law, if the decision to approve Calder's application determines FHBPA's substantial interests. In other words, because an opportunity for a hearing was not clearly offered to, and thereafter waived via inaction by, FHBPA, its petition was not untimely, provided FHBPA has standing to proceed (which is disputed).
The Real Agency Action of Interest
Because Calder must remain continually in compliance with chapter 551 to maintain its license to conduct slot machine gaming, DPMW could not and cannot lawfully renew Calder's license without first determining that Calder remains in compliance with all provisions of the slot machine gaming law. Thus, by necessary implication, DPMW's approval of Calder's application for renewal of licensure reflects and manifests the agency's conclusion that Calder continues to conform to, inter alia, the CCT Requirement. There is no dispute about this.
There is also no dispute that Calder's original LGF, the grandstand, had been demolished by the time of the instant renewal
application, and that in its place, at the trackside apron, near the spot where the grandstand had once stood, Calder had established a "live viewing area" as described above, whose only "connection to" the SMB was (and remains) a paved walkway.
The real agency action of interest to FHBPA is not the renewal of Calder's license per se——although that's important, to be sure, because the license preserves a real-life status quo of facts on the ground that FHBPA considers harmful to its interests; rather, the real determination at issue is DPMW's loose reading of section 551.114(4), without which the approval of Calder's application could not have happened. FHBPA contends that DPMW has not only misapplied section 551.114(4) (in renewing Calder's license) but also misinterpreted the statute (in forming a generally applicable understanding of the CCT Requirement that waters down the plain statutory language).
The issuance of the license was an overt, formal agency action. The statutory interpretation was covert and informal but no less an agency action. When DPMW told Calder in 2009 (and Pompano Park some time earlier) that the CCT Requirement could be satisfied by installing a covered walkway between the SMB and the LGF, it effectively rendered a declaratory statement, albeit without following the procedure set forth in section 120.565. Later, when DPMW indicated to Calder that its current LGF did not need to be a building, because an outdoor, trackside "viewing
area" with a canopy tent located near the place where the former LGF had once stood would be good enough for section 551.114(4), the agency again provided Calder with the functional equivalent of a declaratory statement, absent the formalities. FHBPA was never given a clear point of entry to be heard in these matters.
Attention is being drawn to the agency's articulation, sub silentio, of these declaratory statements-in-fact because DPMW and Calder would like to characterize the action at issue here as being strictly a two-party transaction involving "just" the agency's renewal of Calder's slot machine license. But, that is not true. The renewal of Calder's license necessarily means, to repeat for emphasis, that DPMW has determined that Calder's SMB is "contiguous and connected to" its "LGF" (or "live viewing area," as they understandably prefer to call it), because Calder is required to be in compliance with section 551.114(4) to maintain its continued authority to conduct slot machine gaming operations. These are very real, very consequential interpretive statements. If FHBPA's substantial interests may be affected by these agency decisions regarding the meaning of section 551.114(4), as FHBPA asserts, then its right to a hearing under sections 120.57 and
120.569 concerning DPMW's statutory interpretations has not been waived, because DPMW failed to publish advance notice thereof in accordance with section 120.565(3).7/
In sum, while this case appears on the surface to be a challenge to the agency action that was taken in plain view, i.e., the renewal of Calder's slot machine license, what is really happening is a determination of the correct understanding of section 551.114(4), which is a consequence of DPMW's having provided Calder, behind the scenes, with putatively authoritative interpretations of key statutory terms. Assuming DPMW's interpretive statements affect or determine FHBPA's substantial interests, FHBPA's right to a hearing thereon is not legally tied to Calder's license renewal and, indeed, could have been exercised independent thereof. Once the statutory meaning is finally sorted out, the question——which is secondary to a correct understanding of section 551.114(4)——of whether Calder may continue lawfully to conduct slot machine gaming operations without making changes to its existing pari-mutuel facilities will be easily answered because the material facts about the licensee's current facilities are not genuinely disputed.
CONCLUSIONS OF LAW
DOAH has personal and subject matter jurisdiction in this proceeding pursuant to sections 120.569 and 120.57(1), provided FHBPA has standing, which will be addressed first.
FHBPA's Standing
DPMW and Calder contest FHBPA's standing to maintain this proceeding. All of the litigants view this case as a
third-party challenge by FHBPA, in its capacity as an association that represents horse trainers and owners, to DPMW's decision to renew Calder's slot machine gaming license.
Accordingly, the litigants, for the most part, have advanced the usual arguments regarding the application of the Agrico8/ and Florida Homebuilders Association9/ tests, predictably disputing whether FHBPA has proved an immediate, nonspeculative injury-in- fact in the form of economic losses stemming from Calder's demolition of its grandstand; whether such injury, if established, falls within a cognizable zone of legally protected interests; and whether the substantial interests of a substantial number of FHBPA's members are affected by the intended agency action.
These arguments, while capably made, miss the mark, because FHBPA is not a third party to the real agency action of interest, which is DPMW's interpretation of section 551.114(4), but a "party" in its own right, not qua association.
We start with section 120.52(13), which defines the term "party," in relevant part, as follows:
Specifically named persons whose substantial interests are being determined in the proceeding.
Any other person who, as a matter of constitutional right, provision of statute, or provision of agency regulation, is entitled to participate in whole or in part in the proceeding, or whose substantial
interests will be affected by proposed agency action, and who makes an appearance as a party.
(Emphasis added.)
The fundamental reason for FHBPA's being entitled to participate in this proceeding is a provision of statute, namely section 551.104(10), which as discussed above compels FHBPA to enter into a contract with Calder (as a member of the class of permitholders who apply for a slot machine license) governing the use of slot machine revenue to supplement purses paid on live horse races. FHBPA has done this and, accordingly, is a party to the Statutory Contract between FHBPA and Calder.
It is a long established principle that, "where parties contract upon a subject which is surrounded by statutory limitations and requirements, they are presumed to have entered into their engagements with reference to such statute, and the same enters into and becomes a part of the contract." Citizens'
Ins. Co. v. Barnes, 124 So. 722, 723 (1929). Thus, "provisions
of law applicable to the subject matter of contracts are parts of the contracts, whether so expressed or referred to in the contracts or not." McCaskill v. Union Naval Stores Co., 52 So. 961, 962 (Fla. 1910)(citing State ex rel. Ellis v. Tampa
Waterworks Co., 47 So. 358, 362 (1908)); see also Westside EKG Assocs. v. Found. Health, 932 So. 2d 214, 216 (Fla. 4th DCA
2005)("It is an accepted principle of law that when parties
contract upon a matter which is the subject of statutory regulation, the parties are presumed to have entered into their agreement with reference to such statute, which becomes a part of the contract, unless the contract discloses a contrary intention."), aff'd, 944 So. 2d 188 (Fla. 2006); Northbrook
Prop. & Cas. Ins. Co. v. R & J Crane Serv., Inc., 765 So. 2d 836, 839 (Fla. 4th DCA 2000)("Generally, 'all existing applicable or relevant and valid statutes, ordinances, regulations, and settled law of the land at the time a contract is made become a part of it and must be read into it just as if an express provision to that effect were inserted therein, except where the contract discloses a contrary intention.'") (quoting 17A Am. Jur. 2d Contracts § 381 (1999)(footnote omitted)).
There can be no question that the subject matters of the Statutory Contract——e.g., pari-mutuel wagering, purses for live horseracing performances, the allocation and disbursement of slot machine revenue——are heavily regulated by statute. Section 551.114(4), in particular, specifically adjusts and balances the interests of live gaming in relation to slot machine gaming in a way that is clearly designed to prevent the latter from overshadowing or supplanting the former; the statute thus promotes the sustainable coexistence of potentially competing types of gambling.
The undersigned has no difficulty concluding that, under the principle of constructive statutory incorporation set forth above, section 551.114(4), among other provisions of the gaming laws, must be considered an implicit part of the Statutory Contract, which after all is between the slot machine licensee (who benefits from the right to place its SMGA in an SMB) and the statutorily designated representative of the horsemen who make the live gaming performances possible (and who are protected by the CCT Requirement). This means, in turn, that the provisions of the statute are contractual promises enforceable in an action at law by either party to the Statutory Contract, no less than the express terms of that agreement.
As a licensee, Calder is obligated to the public to fulfill the CCT Requirement. As a party to the Statutory Contract, Calder is obligated to FHBPA to comply with that requirement. Calder and FHBPA disagree as to the meaning of the language comprising the CCT Requirement, and thus they dispute whether Calder is meeting its obligations thereunder. In an ordinary contractual dispute of this nature, a party in FHBPA's shoes likely would bring a suit in circuit court for declaratory relief and perhaps specific performance or damages. This situation is a little different because DPMW, as the state agency responsible for administering the gaming laws, is in a position to interpret section 551.114(4) with authority;
although it has not done so, DPMW could even adopt its interpretations of the statute as rules and give them the full force and effect of law (subject to a determination of validity if challenged).
What DPMW did, as found above, was make informal declaratory statements to Calder about the meaning and effect of the CCT Requirement. These pronouncements were authoritative as between DPMW and Calder; both of them, moreover, were, and remain, happy with the decisions. When DPMW made these declaratory statements-in-fact, however, the agency did not just construe section 551.114(4); whether it meant to or not, DPMW also construed the Statutory Contract at the same time, necessarily, because the CCT Requirement is incorporated as a term in that agreement by operation of law.10/ Not even a court may render a declaratory judgment regarding the meaning of a contract without all of the indispensable parties, that is, the contracting parties, being joined to the suit.11/ But that is what DMPW effectively did here, when it informally made de facto declaratory statements which affected the rights and obligations of contracting parties without affording them all a meaningful opportunity to participate. Had DPMW's informal interpretive statements been issued properly in accordance with the procedure specified in section 120.565, notice would have been published as required under subsection (3) of that statute, and FHBPA
almost certainly would have moved to intervene——and been allowed to do so, owing to its unique interest in the meaning of
section 551.114(4) and its contractual right to expect Calder's compliance therewith.
That DPMW and Calder dispensed with the formalities of section 120.565 in favor of an informal remedy does not defeat FHBPA's entitlement to participate in the formulation of an agency interpretation of section 551.114(4); it simply forced FHBPA to initiate the formal proceeding that DPMW and Calder evaded.
In the final analysis, there is no way to conclude that Calder can continue to enjoy that which it has received from DPMW to date, i.e., authoritative ex parte declarations of the meaning of key provisions of section 551.114(4), which minimize Calder's contractual obligations to FHBPA by relaxing the CCT Requirement in a way that favors slot machine gaming over live gaming. FHBPA is entitled to participate and be heard in this matter because of section 551.104(10), which required FHBPA to enter into the Statutory Contract, which implicitly incorporates the CCT Requirement of section 551.114(4), whose meaning is genuinely in dispute. FHBPA is a "party" hereto as that term is defined in section 120.52(13)(b). FHBPA has standing to maintain this proceeding.
Very briefly, lest it be inferred that the undersigned believes FHBPA has failed to satisfy the Agrico test, an additional and alternative justification for FHBPA's standing, using the traditional injury and zone-of-interest framework, will be provided.
DPMW and Calder, and even FHBPA to a lesser extent, have placed too much emphasis on the immediacy of the economic injury, if any, FHBPA is likely to suffer as a result of Calder's having demolished its grandstand LGF. DPMW and Calder's position, in a nutshell, is that attendance at Calder's live horse races has been declining for years, a trend that began long before the removal of the grandstand. The audience, they say, is down to a few hundred devotees who will keep coming to the track despite the spartan nature of the current "live viewing area" on the apron. Further, according to DPMW and Calder, any financial losses from smaller handles (money wagered on live races) are offset by the slot machine revenue, in which FHBPA shares, to its economic benefit. Indeed, it is undisputed that FHBPA would suffer a substantial economic injury if Calder were to lose its slot machine license for good.
FHBPA nonetheless has persuaded the undersigned that the alleged absence of a legally sufficient LGF is a long-term threat to FHBPA's economic interests. One can accept as true that attendance at Calder's horse races was in decline even
while the grandstand existed, and that dozens of die-hard gamblers will not be discouraged from watching and wagering on the races by the absence of a more substantial trackside facility; one can accept these assertions, and still recognize that tearing down the grandstand and replacing it with a tent is unlikely to win back former patrons or attract new ones.
Calder's failure to replace the grandstand with a comparable LGF is a move that neither anticipates nor encourages future growth, but instead smacks of throwing in the towel and accepting as inevitable the waning interest in live horse races. It is not too speculative to foresee a future in which attendance at live races steadily falls due to attrition, as younger fans, turned off by the bare-bones trackside viewing experience Calder has on offer, fail to materialize.
But there are unquantifiable, noneconomic injuries that the undersigned considers even more direct and immediate. In this regard, it should be noted that FHBPA is not an economic competitor of Calder's whose motive is to limit the number of licensees in the market; the standing of that kind of third- party challenger, which is usually down to purely economic considerations, is rightfully suspect. To the contrary, FHBPA is in a business relationship with Calder, which it hopes will continue to be mutually advantageous and financially successful. FHBPA does, however, compete with Calder's slot machine gaming
operation, inasmuch as the casino is a draw, and the slots attract money that otherwise might be wagered on horse races.
As mentioned, section 551.114(4) strikes a balance between slot machine gaming and live gaming. The CCT Requirement is clearly intended to protect and benefit the live gaming operation of which FHBPA is an integral part. It does this in two readily apparent ways. First, it prevents (or creates a disincentive to) the construction of an SMB that is of significantly higher quality or appeal than the LGF because a genuinely contiguous and connected SMB would be mismatched, aesthetically and architecturally, if joined to an obviously inferior or decrepit LGF; if an obsolete LGF needs upgrading or replacement, the statute plainly contemplates that the new or refurbished LGF will be brought up to the level of the SMB, should one be built.
Second, the CCT Requirement is designed to ensure that an SMB is actually part of the LGF, so that whether a patron is playing the slot machines or watching races, he is in the same house, and thus more likely to engage in both activities.
The CCT Requirement thus guards against the slot machine operation from becoming the tail that wags the dog, by requiring at least a kind of structural parity between the LGF and the SMB if an SMB is to be used. FHBPA alleges that DPMW's interpretation of the CCT Requirement, as expressed to Calder in
the informal declaratory statements, turns section 551.114(4) on its head, stripping FHBPA of advantages the legislature meant for the live gaming operation. A statutory interpretation that rescinds or reduces an intended benefit is within the beneficent statute's zone of protected interests. See SCF, Inc. v. Fla.
Thoroughbred Breeders' Ass'n, 227 So. 3d 770, 777 (Fla. 1st DCA 2017). Therefore, FHBPA has standing to challenge the agency's pro-slots interpretation of a statute that is intended to benefit live gaming.
FHBPA is harmed, albeit not in a purely financial way, by DPMW's interpretation of section 551.114(4), which palpably diminishes the importance of live gaming relative to slot machine gaming. Consider Calder's current configuration. For slot machines, there is a new casino. For live gaming, in stark contrast, there is a collapsible canopy tent where the grandstand used to be, near the apron, and some outdoor seating, trackside. The unmistakable message is that the live horse races, having declined in popularity, have been degraded, demoted, reduced to second-class status; horseracing is no longer the main attraction, but an afterthought. In effect, Calder is being allowed to put FHBPA's "product" in what the horsemen consider a subpar "package." As the designated agent of those horsemen whose livelihoods are tied to live gaming,
FHBPA is directly and immediately harmed by this loss of position and prestige in the industry.
A related, but distinct, noneconomic injury arises from FHBPA's unique interest, as a party to the compulsory Statutory Contract, in Calder's continued obedience to the slot machine gaming law. Due to the incorporation doctrine, discussed above, FHBPA has a contractual right to Calder's compliance with section 551.114(4), among other applicable statutes, which gives FHBPA a substantial interest in the integrity of the gaming laws. See Royal Palm Square Ass'n v.
Sevco Land Corp., 623 So. 2d 533, 535 (Fla. 2d DCA 1993). If, as FHBPA alleges, Calder is operating an illegal SMB, with DPMW's approval no less, that is a situation that obviously undermines the regulatory framework, to the detriment of FHBPA, and should be arrested.
It is concluded that FHBPA has third-party standing under the Agrico test.
Clear Point of Entry
DPMW and Calder contend that FHBPA was not entitled to any sort of notice regarding the agency's intended decision to renew Calder's slot machine license. Section 120.569(1), however, provides that "[p]arties shall be notified of any order, including a final order," and that such notice "shall inform the recipient of any administrative hearing or judicial
review that is available . . . ; shall indicate the procedure which must be followed to obtain the hearing or judicial review; and shall state the time limits which apply." This notice of rights is often called a "clear point of entry."
DPMW and Calder's argument that DPMW did not need to give FHBPA a clear point of entry assumes that FHBPA is not a party, and thus begs the question of standing, which the undersigned has just decided in FHBPA's favor. That being the case, the contention that DPMW was somehow not required to provide formal notice to FHBPA of its intended agency action on Calder's application for renewal of licensure is rejected.
It is a fundamental tenet of administrative law that when an agency determines a party's substantial interests, the agency must grant the affected party a clear point of entry into formal or informal proceedings under chapter 120, which cannot be "so remote from the agency action as to be ineffectual as a vehicle for affording [the affected party] a prompt opportunity to challenge" the decision. See, e.g., Gen. Dev. Utilities, Inc. v. Fla. Dep't of Envtl. Reg., 417 So. 2d 1068, 1070
(Fla. 1st DCA 1982). Moreover, unless and until a clear point of entry is offered, "there can be no agency action affecting the substantial interests of a person." Fla. League of Cities, Inc. v. State of Fla., Admin. Comm'n, 586 So. 2d 397, 413
(Fla. 1st DCA 1991).
Indeed, absent a clear point of entry, "the agency is without power to act." Id. at 415; see also, e.g., Capeletti Brothers, Inc. v. State Dep't of Transp., 362 So. 2d 346, 348-49
(Fla. 1st DCA 1978)("Absent [an express] waiver [of the right to an administrative hearing], we must regard an agency's free-form action as only preliminary irrespective of its tenor. . . .
Until proceedings are had satisfying Section 120.57, or an opportunity for them is clearly offered and waived, [an agency] is powerless to" determine a party's substantial interests.).
Because there can be no implied waiver of the right to an administrative hearing unless a clear point of entry was given, an agency's failure to give proper notice has the effect of freeing the affected party to bring an administrative proceeding without regard for the otherwise applicable period of limitation (usually 21 days after receiving a clear point of entry). See Fla. Admin. Code R. 28-106.111.
That FHBPA might have had actual or constructive notice of the agency's intended decisions, as DPMW argues, is irrelevant, because whatever informal notice FHBPA might have received did not contain all of the information required by section 120.569(1). DPMW's failures to afford FHBPA clear points of entry to contest the preliminary decision to approve Calder's renewal license and the earlier declaratory statements- in-fact mean that this action was not untimely brought.
Burden of Proof
As the applicant for a license, Calder bears the ultimate burden of proving by a preponderance of the evidence that DPMW should issue the renewal license for fiscal year 2018-
Fla. Dep't of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778
(Fla. 1st DCA 1981); § 120.57(1)(j), Fla. Stat.
Yet, to the extent this case is a challenge to DPMW's de facto declaratory statements, FHBPA has the burden to prove any facts material to a determination in its favor.
The burden of proof is not a factor in the outcome of this proceeding, however, because the decision does not depend upon the resolution of disputed factual issues. As has been stated, neither the historical facts, nor the current "facts on the ground" at Calder's track, are in dispute. As a matter of undisputed fact, Calder is in compliance with section 551.114(4) as interpreted by DPMW. At the same time, however, Calder is not in compliance with section 551.114(4), as a matter of undisputed fact, unless DPMW's interpretation of the CCT Requirement is correct.
DPMW's interpretation of the CCT Requirement, moreover, is clearly established, as a matter fact. Thus, the interpretation of section 551.114(4) presents a pure question of law for which no additional proof is required.
The Meaning of Section 551.114(4)
Section 551.114(4), which is quoted in full in paragraph 6 above, provides two options for the location of the SMGA. The SMGA may be located either within the current LGF or in an SMB that must be contiguous and connected to the LGF.12/ Based upon the juxtaposition of facility and building in the operative sentences, DPMW and Calder assert that the legislature differentiated between the terms, to the point that the statutory language denotes, respectively, different kinds of structures——even, in the case of facilities, no structure at all, but merely a "live viewing area." See Resp't PRO at 8. They point out that buildings are a subset of facilities inasmuch as every building is a facility but not every facility is a building. Thus, they argue, while the LGF certainly may be a "building," only the SMB must be a "building" as that term is commonly understood, i.e., a walled and roofed structural improvement that is permanently affixed to land and becomes part of the real property. This reasoning is not illogical per se, but it loses sight of the statute's plain language and results in a misreading of the text.
To begin, the legislature did not mean to suggest that an LGF can be any kind of facility. The legislature understood that a racetrack, for example, is not an LGF, even though a racetrack constitutes a pari-mutuel facility (when used for the
conduct of pari-mutuel wagering). See § 550.002(23), Fla. Stat.
Put simply, LGFs, too, are a subset of facilities. Thus, the premise that a facility need not be a building is insufficient to prove logically that an LGF need not be a building. The question is not whether all facilities are buildings, but rather, more narrowly, whether all LGFs are (required to be) buildings. The statute unambiguously supplies the answer, when read carefully.
Although the term "live gaming facility" is not defined as such, the term "pari-mutuel facility" is. It "means a racetrack, fronton, or other facility used by a permitholder for the conduct of pari-mutuel wagering." § 550.002(23), Fla. Stat. The term "racetrack" is not defined, but it is a common term with a plain meaning that is readily understood. "Fronton" is defined as a "building or enclosure that contains a playing court with three walls designed and constructed for playing the sport of jai alai or pelota." § 550.002(10), Fla. Stat. A fronton is a type of building also known as an arena.
While a racetrack is quite a different type of improvement from a fronton, what these facilities have in common is that they are both real estate. According to the principle of ejusdem generis, therefore, which instructs that when a general term follows a list of specifics, the general term is interpreted to include only the same type of items as those
listed, the only kind of property used for the conduct of pari- mutuel wagering that may be classified properly as an "other facility" under section 550.002(23) is real property.
The LGF is clearly something used by a permitholder for the conduct of pari-mutuel wagering. That the statute calls this required improvement a live gaming facility (rather than, e.g., a live gaming area) tells us definitely that the legislature considered this something to be a facility. Because a facility used for the conduct of pari-mutuel wagering is by definition a "pari-mutuel facility" under section 550.002(23), we can confidently deduce that when the legislature coined the term "live gaming facility," it had in mind a permanent improvement to real property, such as a racetrack or fronton.13/
As for the type of permanent improvement the legislature had in view, we know right off the bat that it must be one within which an SMGA could be contained or enclosed.
This is because section 551.114(4) uses the preposition within (rather than, say, upon or under) to describe where, in relation to the LGF, the SMGA may be located. The clear and unambiguous meaning of the word "within" as used in this context is "inside of," which rules out the possibilities that an LGF might be an outside area such as a patio or deck or a shelter without walls of some kind. It also makes clear that the LGF must have discernable boundaries.
It is significant, as well, that the statute does not describe any circumstance(s) in which the licensee's SMGA may not be located within its current LGF. The authority given to a slot machine licensee to place its SMGA within the current LGF, in other words, is not conditioned on the LGF's being a building. Yet, if the licensee opts to place its SMGA in an SMB, which is the only alternative to using the LGF for this purpose, the structure containing the SMGA must be a building. Is it likely that the legislature would have required a building on the one hand but not the other?
Under the most natural and readily apparent meaning of the provisions at issue, the alternatives specified, namely the current LGF and any SMB that may be used, are both presented as equally suitable for the stated purpose, which is to house the SMGA. In ordinary discourse, when, as the means of accomplishing a particular goal, an author prescribes two alternatives that he deems equally——but not universally—— suitable, the author commonly identifies the circumstances, not otherwise obvious, which would rule out one option or the other as unsuitable. This is because, in the absence of such qualification, the reader naturally infers the freedom to select either alternative in all situations.
This point can be illustrated with a simple example.
Suppose an employer's policy manual specifies that, for
intrastate business travel, an employee's privately owned vehicle ("POV") may be driven to and from the destination, or the employee may use a rental car that must be within the compact or economy class. This means, unambiguously, that both the POV and the rental car are equally suitable for all intrastate business trips; the employee may choose whichever option is best for him or her.
We also understand, however, that the employer plainly takes for granted that its employees' POVs are in reasonably sound mechanical condition, even though that condition is not stated. We know this, because it is not necessary, in ordinary discourse, to state the obvious; and it is obvious that an unroadworthy vehicle is unsuitable for the purpose of intrastate business travel.
No one, moreover, reasonably would understand the policy manual as having authorized employees to drive their golf carts, bicycles, or riding lawnmowers to in-state destinations on work-related trips, even though any of these conveyances could be classified as a "privately owned vehicle" in a different context. The stated purpose (business travel) and specific alternative (rental car) make very clear that the term "vehicle" in this context means an automobile or its close equivalent.
Returning to the facts at hand, the legislature unambiguously stated that an SMGA must be located within a facility or building. The legislature almost certainly used these words as synonyms, which they often are, and likely never thought to specify that an LGF must be a building, any more than the author of the hypothetical manual above would have noted that a POV must have a working engine, which would be superfluous. Slot machine gaming, moreover, is licensable only secondary to the primary permitted use of pari-mutuel wagering, which makes an SMGA a kind of accessory use whose location, one would most naturally assume, should be in a structure subordinate to the main facility, i.e., the LGF. Therefore, it would defy common sense and reason, and reverse the relative importance that the statutory scheme places upon pari-mutuel wagering versus slot machine gaming, to conclude that the legislature intended to require sturdier, more robust shelters for SMGAs than it believed LGFs must be capable of affording.
But whether or not the legislature imagined that an LGF might be something less permanent, less substantial, and less sheltering than a building, the fact is, to repeat, that the legislature did not specify that the SMGA may be located in the current LGF only if the LGF is a building. Had that proviso, or any condition really, been attached to the authorization to use the LGF for the SMGA's location, such that
the LGF would be eliminated as an option if the condition were not met, the obvious implication would have been that LGFs need not always be SMGA-suitable. Taking that thought a step further, anything expressly identified that would preclude the licensee from using its LGF to house the SMGA effectively would be deemed a legally compliant condition vis-à-vis the LGF. That is, had the statute said that the SMGA may be located in the current LGF if the LGF is a building, the statute then would have recognized as acceptable the use of nonbuilding structures as LGFs——and thereby effectively authorized the same.
Conversely, the absence of any condition or restriction on the use of the LGF as the structure within which the SMGA may be located, coupled with the legal requirement that the permitholder always have an LGF, means that the prospective slot machine licensee is not given the option of NOT having an SMGA-suitable LGF.14/ Because, in contrast, the permitholder is not required to have an SMB, the statute makes the LGF the default location for the SMGA. This, ultimately, forces the conclusion that the LGF must be a building.
At first blush, the statute appears to set forth a simple, A or B-type of binary choice between two equivalent alternative structures, each suitable for the purpose of enclosing the SMGA. This is not quite an accurate description of what is actually stated, however, because, as just explained,
the licensee cannot elect NOT to have an LGF, and the statute does not authorize the licensee to maintain an LGF incapable of lawfully housing the SMGA; and, further, because the SMB must be "contiguous and connected" to the LGF. This latter condition means, at a minimum, that an SMB cannot exist as an independent structure; its existence depends on the simultaneous existence of an LGF. Thus, if we use the expression "(X/SMGA)" to mean "the SMGA is located with X structure," the statute does NOT offer this simple binary choice: (LGF/SMGA) OR (SMB/SMGA).
Rather, using the symbol ":" to denote "contiguous and connected," the choice is between: (LGF/SMGA) OR LGF:(SMB/SMGA).
We can add to this formula symbols to denote the type of structure within which the SMGA may be located. Let's use "[]" to mean "building." Thus, because the SMB must be a building, the statutory choice can be more accurately depicted as: (LGF/SMGA) OR LGF:[(SMB/SMGA)].
One of the ultimate questions here is whether an LGF may lawfully be a nonbuilding facility such as a racetrack. If the answer were yes, then, using the symbol "{}" to denote "nonbuilding facility," we can see that the statute would make available the following four alternatives:
Florida Administrative Code Rules 61D-14.050 and 61D- 14.018, however, impose requirements on the SMGA's structural enclosure that only a building could meet, thereby eliminating
section 551.114(4) by imposing a nonstatutory restriction on the licensee's use of its LGF, making the rules vulnerable to challenge as invalid exercises of delegated legislative authority.
Because the undersigned presumes DPMW would not knowingly promulgate an invalid rule, he concludes that DPMW once understood that the statute does not authorize the use of a nonbuilding facility as an LGF——which is just the negative way of saying that the statute requires the LGF to be a building. Of course, if the LGF must be a building, then
The same conclusion may be reached without resorting to rules 61D-14.050 and 61D-14.018. Thus far we have not focused much attention on the condition that an SMB, if used for the SMGA, must be "contiguous and connected to" the LGF. The meaning of the term "contiguous and connected" is in dispute here, but it, too, is unambiguous when read within the context of the section 551.114(4)——and it compels the conclusion that the LGF must be a building. The phrase "contiguous and connected to" is part of an essential adjective clause, i.e., "that must be contiguous and connected to the live gaming facility." This dependent clause, which describes the kind of building wherein the SMGA may be located (if not located within the LGF), simultaneously establishes the statutorily required relationship between facility and building——"contiguous and connected." This is the tie that binds the two structures: FACILITY<contiguous & connected>BUILDING.
The term "contiguous" means "being in actual contact" and "touching along a boundary or at a point." See "Definition of contiguous," Merriam-Webster.com, http://www.merriam- webster.com (last visited May 2, 2019). Similar in meaning, but not synonymous, the term "connected" means "joined or linked together." See "Definition of connected," id. Taken together, "contiguous and connected" clearly do not mean merely proximate, abutting, adjoining, or adjacent, but conjoined, integrated, and
united for a common purpose. The plain meaning of these words, as used in these sentences, conveys that the legislature intended to require a substantial physical unity between the named structures, and it is not difficult to deduce why. Almost certainly, the legislature wanted to prevent slot machine gaming from cannibalizing the preexisting live gaming business, which would be a reasonably foreseeable consequence of building a brand new slot machine gaming facility or casino at some distance from the current LGF at the racetrack or fronton.
Section 551.114(4) allows the licensee build a new casino, provided that, like a department store in a shopping mall, the casino is made part and parcel of the current LGF, the better to generate traffic for both the slots and the live gaming, and to reduce the odds of overshadowing, or drawing bettors away, from the LGF.
We have seen already that the LGF must be a structure within which the SMGA may be located. Thus, the LGF must be three-dimensional, as, of course, is a building. A pair of three-dimensional structures (one of which must be a building) cannot be contiguous on a horizontal plane——i.e., touching along the ground-level edges——the way that, say, land may be.15/ Rather, they must be contiguous along a vertical plane.
With this in mind, we can safely discard as too remote the possibility that the legislature envisioned two structures
abutting and connected along a common vertical edge (or corner), even though such an odd configuration might technically satisfy the literal meaning of "contiguous and connected." Plainly, the legislature intended to mandate that, if used, an SMB be contiguous and connected to the LGF across the vertical plane of their abutting faces. Section 551.114(4) effectively requires that the LGF and SMB be two separate and structurally independent buildings using a party wall.
And that is how the conclusion may be reached that the statute clearly and unambiguously mandates that the LGF be a building. Because a building is the only kind of reasonably imaginable, contextually appropriate structure capable of sharing a party wall with an SMB, it follows that a building is what the LGF must be. When the legislature provided the option of housing the SMGA in an SMB, its intention, which is manifest in the plain language of the statute, was to require the licensee to locate the SMGA in the current LGF or in an annex thereto.16/
While it might seem ironic that so lengthy an analysis should have been undertaken to explain why a statute is clear and unambiguous, the undersigned has explicated the reasoning behind his conclusion in this regard because the outcome of the case hinges on the meaning of section 551.114(4). As an alternative rationale for the conclusion that the LGF must be a
building, it would be much easier simply to deem the statute ambiguous on this point and cut to the chase by applying the doctrine of noscitur a sociis (a word is known by the company it keeps). So, although the statute is not ambiguous, the undersigned will construe it as if it were, to show that the result is the same, either way.
As a rule of statutory interpretation, noscitur a sociis "means that [when] general and specific words which are capable of an analogous meaning [are] associated together[, they] take color from each other, so that the general words are restricted to a sense analogous to the less general." Carraway v. Armour & Co., 156 So. 2d 494, 495 (Fla. 1963); see also
Cepcot Corp. v. Dep't of Bus. & Prof'l Reg., 658 So. 2d 1092 (Fla. 2d DCA 1995); Turnberry Isle Resort & Club v. Fernandez,
666 So. 2d 254 (Fla. 3d DCA 1996). "This [is the] rule [that courts] rely upon to avoid ascribing to one word a meaning so broad that it is inconsistent with its accompanying words, thus giving 'unintended breadth to'" legislative enactments.
Gustafson v. Alloyd Co., 513 U.S. 561, 575, 115 S. Ct. 1061,
1069 (1995)(quoting Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307 (1961)).
Here, of course, a general word (facility) is associated together with a more specific term (building). These two words are capable of an analogous meaning, and they are
often used interchangeably, as synonyms. In fact, DPMW's rule 61D-14.018, which prescribes the state office space requirements for slot machine licensees, uses the term
"facility" repeatedly and obviously as a synonym for "building." Noscitur a sociis instructs that, in the context of section 551.114(4), "facility" should be understood, as it is commonly used, to mean "building." To interpret "facility" as having its broadest senses, so that it includes nonbuilding enclosures or shelters, or even personal property such as tents and catering canopies, not only would frustrate the evident legislative intent, but also produce a ripple effect of further misinterpretation, because giving a broad meaning to "facility" in turn requires that the phrase, "must be contiguous and connected to" the LGF, be stretched beyond common understanding to accommodate nonbuildings, which might be attached, but would not ordinarily be described as "contiguous," to a building.
This cascading interpretive failure works in the other direction, too, as shown by the facts of this case. Here, DPMW's original interpretive mistake was to water down "contiguous and connected" to mean, weakly, "within a short walking distance of, and connected by a (preferably covered) walkway to"——or perhaps merely just "not separated by public roadways, waterways, or similar barriers" so that a "patron may, without obstruction, walk from" the LGF to the SMB.17/ Resp't PRO
at 14. This is an outright distortion of the ordinary meaning of the words "contiguous and connected to" when used, as here, to define the necessary relationship between a building and a facility. It is an "interpretation" that excises the words "contiguous and"——and still manages to make the words "connected to" all but disappear.18/
The divorce of "connected to" from "contiguous" opens the door to the deformation of the meaning of "facility" that has given rise to the instant dispute. Obviously, an SMB can be located within a short walking distance of, or not on the other side of a street or river from, a great many kinds of facility, from parking lots to portable toilets, and while many of these would be unusable as LGFs, many other nonbuilding facilities would, in fact, do as LGFs, if making do were all that the law requires. What nonbuilding facilities such as catering tents and the like cannot do is be "contiguous AND connected to" another building——not, that is, in any sense of these words as ordinarily used and understood.
Ultimate Conclusions
Calder's current "live viewing area" is not a compliant "live gaming facility" as that term is used in section 551.114(4).
Because Calder does not have a compliant LGF, its casino (SMB) is not "contiguous and connected to" an LGF as required by section 551.114(4).
Even if Calder's "live viewing area" were a compliant LGF, which it is not, Calder's SMB is not "contiguous and connected to" the "live viewing area."
Because Calder is not currently in compliance with section 551.114(4), it has lost its "continued authority for the conduct of slot machine gaming." See § 551.104(4), Fla. Stat.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, enter a final order denying Calder's application for renewal of its slot machine license for the fiscal year 2018-19.
DONE AND ENTERED this 24th day of May, 2019, in Tallahassee, Leon County, Florida.
S
JOHN G. VAN LANINGHAM
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 24th day of May, 2019.
ENDNOTES
1/ See Fla. Admin. Code R. 61D-2.001(12).
2/ Calder and FHBPA, together with Gulfstream Park Racing Association, Inc. ("Gulfstream"), are parties to a separate contract, the Multi-Party Agreement. Pursuant to this agreement, which is not directly at issue here, Gulfstream manages and operates Calder's annual, 40-day race meet. The Multi-Party Agreement also establishes a percentage rate for slot machine revenues, thereby modifying or supplementing the Statutory Contract.
3/ To be fair, Calder had good business reasons for taking this action. The grandstand was an aging, expensive-to-maintain, oversized, and underutilized building. At the same time, however, no one contends that section 551.114(4) prohibits a licensee from taking down an obsolete LGF. The questions here are whether Calder replaced its grandstand with a legally sufficient LGF, as section 551.114(4) clearly requires; and, if so, whether Calder's SMB is contiguous and connected to the current LGF, as, again, the statute clearly requires.
4/ Without getting ahead of ourselves, it should be fairly obvious that this was one of the reasons the legislature imposed the CCT Requirement. Section 551.114(4) reflects a careful balancing of the potentially competing interests between preserving historical pari-mutuel operations and promoting newly permitted slot machine gaming——a balance struck as a matter of broad public policy through the democratic and constitutional process of enacting legislation. DPMW upset that balance, undemocratically and nontransparently, by tilting the scales in favor of the slots via nonpublic statutory interpretations communicated, not officially through proposed rules or formal declaratory statements, but privately (and possibly not even in writing) to Pompano Park and Calder.
5/ Because the definition of the term "rule" in section 120.52(16) expressly includes statements of general applicability that implement or interpret law, an agency's interpretation of a statute that gives the statute a meaning not readily apparent from its literal reading and purports to create rights, require compliance, or otherwise have the direct and consistent effect of law, is a rule, whereas one which simply reiterates a statutory mandate is not. See Fla. Quarter Horse Racing Ass'n, Inc. v. Dep't of Bus. & Prof'l Reg., Case No. 11-5796RU, 2013 Fla. Div. Admin. Hear. LEXIS 558, at *39-40
(Fla. DOAH May 6, 2013), aff'd, Fla. Quarter Horse Track Ass'n v. Dep't of Bus. & Prof'l Reg., 133 So. 3d 1118 (Fla. 1st DCA 2014); see also Grabba-Leaf, LLC v. Dep't of Bus. & Prof'l Reg., Div. of Alcoholic Bevs. & Tobacco, 257 So. 3d 1205, 1208 (Fla.
1st DCA 2018)(simple reiteration of what is "readily apparent" from the text of a law falls within rulemaking exception); State Bd. of Admin. v. Huberty, 46 So. 3d 1144, 1147 (Fla. 1st DCA 2010); Beverly Enters.-Fla., Inc. v. Dep't of HRS, 573 So. 2d
19, 22 (Fla. 1st DCA 1990); St. Francis Hosp., Inc. v. Dep't of HRS, 553 So. 2d 1351, 1354 (Fla. 1st DCA 1989). DPMW's
interpretation of section 551.114(4) obviously gives the terms "live gaming facility" and "contiguous and connected to" meanings that are not readily apparent from——and indeed which enlarge, modify, and contravene——the plain statutory language. The undersigned therefore has no doubt that the agency's interpretive statements regarding the statute's meaning constitute unadopted rules.
Yet, in the Rule Challenge, the ALJ determined that DPMW's interpretive statements——the same ones, more or less, currently under consideration——were not unadopted rules. He reasoned that these statements applied only to Calder and hence were not
generally applicable. Rule Challenge, 2018 Fla. Div. Adm. Hear. LEXIS 654, *22-23. The ALJ in the Rule Challenge further suggested that the alleged unadopted rules could not become actual unadopted rules "[u]nless another pari-mutuel facility in the future undertakes to construct a new building for its [SMGA] or to move its [SMGA] to a different existing building." Id. at
*23. The undersigned politely disagrees with his colleague on this point.
For what it's worth, as the undersigned sees it, an otherwise generally applicable statement is not rendered case- specific and reduced to the status of an order merely because it has been applied only to one licensee so far. The question of general applicability should not turn on the number of persons affected (to date or in the foreseeable future) but on whether the statement is framed at such a level of generality that
it applies uniformly to the class of persons or activities within its field of operation. DPMW's statements that section 551.114(4) requires no more than that the LGF be a
viewing area where patrons can place bets on, and observe, live contests; and that such an area is "contiguous and connected" to an SMB if both are located on the same parcel of land and customers can walk from one place to another without crossing a street or river, are plainly so general in nature as to apply to all slot machine licensees.
In the Rule Challenge, the ALJ stated that, "[a]s matters stood at the time of the hearing, Calder was the only licensee that could possibly be affected by [DPMW's] interpretation of the 'contiguous and connected' requirement." Id. at *22-23.
The undersigned presumes that the record in that case, with which the undersigned is unfamiliar, fully supported this statement. Based on the evidence in this case, however, the undersigned could not make such a blanket assertion. The evidence before the undersigned shows that DPMW's interpretation of the CCT Requirement affords other licensees a clear opportunity to take advantage of an incredibly permissive reading of the statute. Then there is the fact, proved in this case, that FHBPA is locked into a business relationship with Calder pursuant to the Statutory Contract. This latter situation, which rather uniquely makes FHBPA, not a licensee, but an instrumentality of the legislative will, means that DPMW cannot construe section 551.114(4) without affecting the terms and conditions of the compulsory contractual relationship between Calder and FHBPA. This will be discussed at greater length in connection with the issue of standing.
6/ Also not at issue in the Rule Challenge were any questions concerning whether, as a matter of ultimate fact, based on the correct reading of the statute, the arrangement of real property, fixtures, and personalty at Calder's pari-mutuel facility conforms to the requirements of section 551.114(4).
Section 120.56(4) is simply not interested in whether a particular licensee is, or is not, in compliance with the regulatory regime. If FHBPA had prevailed in the Rule Challenge, Calder's compliance with the CCT Requirement would have been called into question, for sure, but the question would not necessarily have been settled. For one thing, a determination under section 120.56(4) that an agency statement meets the definition of a rule does not mean that the statement, if adopted pursuant to the rulemaking procedure, would have to be an invalid exercise of delegated legislative authority. In any event, the Rule Challenge does not establish, by administrative finality, any ultimate facts regarding Calder's compliance with the CCT Requirement that are binding on the parties to this case.
7/ Fla. Optometric Ass'n v. Dep't of Prof'l Reg., Bd. of Opticianry, 567 So. 2d 928, 935 (Fla. 1st DCA 1990).
8/ Agrico Chem. Co. v. Dep't of Envtl. Reg., 406 So. 2d 478 (Fla. 2d DCA 1981).
9/ Fla. Home Builders Ass'n v. Dep't of Labor & Emp. Sec., 412 So. 2d 351 (Fla. 1982).
10/ DPMW should have recognized that it was determining FHBPA's interests in relaxing the CCT Requirement for the benefit of Calder even if, as seems probable, the doctrine of statutory incorporation never entered its mind. It is not as if FHBPA is a stranger to the live gaming and slot machine operations taking place at Calder's pari-mutuel facility or a nondescript contractor of Calder's whose identity and role DPMW would be unlikely to know. On the contrary, FHBPA (unlike Calder) has been singled out by name in the statutes; this special treatment confirms FHBPA's status as a fixture of the state's pari-mutuel industry, whose involvement in horseracing is well known to the agency, and whose written agreement with Calder is on file with DPMW, as required by statute.
11/ An "indispensable party" is one who has an interest of such a nature in the subject matter of the dispute that a final judgment cannot be rendered between other parties to the suit,
or cannot be rendered without leaving the controversy in such a situation that its final determination may be inconsistent with equity and good conscience. Unless such a person is made a party, the court will not proceed to a final determination.
Nat'l Title Ins. Co. v. Oscar E. Dooly Assocs., 377 So. 2d 730, 731 (Fla. 3d DCA 1979); see also Loxahatchee, Etc. v. Martin Cty., Etc., 409 So. 2d 135, 137 (Fla. 4th DCA 1982).
12/ In the Rule Challenge, the ALJ read the statute as providing three options because he viewed the use of an existing building (in lieu of the LGF) as distinct from the use of a newly constructed building (in lieu of the LGF). See Rule Challenge, 2018 Fla. Div. Adm. Hear. LEXIS 654 at *21-22. This is not an incorrect observation, technically speaking, but it overvalues the distinction between existing and newly built SMBs, which the undersigned regards as irrelevant to the statute's meaning and application. The distinction that makes a difference is between LGF and SMB.
13/ To conclude otherwise, one would need to imagine that despite calling the LGF a "facility," the legislature did not mean that the LGF is necessarily a "pari-mutuel facility," which is nonsensical and would reflect a carelessness in drafting that should not lightly be ascribed to the lawmakers; or (somewhat more plausibly) that the general, "other facility" phrase in the section 550.002(23) definition can be interpreted to include items different in kind, e.g., personal property such as a tent or canopy, from the ones specifically named, i.e., racetracks and frontons, which cuts against the canon of construction known as ejusdem generis and would implicitly expand the statutory definition of "pari-mutuel facility." Neither of these unlikely possibilities provides reasonable grounds for disregarding the plain and obvious import of the legislature's classifying of LGFs as "facilities."
14/ The ALJ in the Rule Challenge reached a different conclusion regarding section 551.114(4), stating that, in his opinion, the statute does not require the LGF to be fully capable of housing slot machines, if the slot machines are in fact housed elsewhere. See Rule Challenge, 2018 Fla. Div. Adm. Hear. LEXIS 654 at *26-27. That portion of the Rule Challenge Final Order is dicta, which the undersigned believes is at odds with the statute's plain language.
15/ The second floor of a two-story building, or the basement of a house, could be described as contiguous to the first-floor
enclosure along a horizontal plane, but ordinarily these (a second story or basement) would be considered part of the same building as the ground level structure, not differentiable structures. In any event, if a licensee were to locate its SMGA on the second floor of its LGF or in the basement thereof, the "contiguous and connected" condition, if applicable, clearly would be satisfied.
16/ An "annex" is "a building that is attached to or near a larger building and usually used as part of it : WING." See "Definition of annex," Merriam-Webster.com, http://www.merriam- webster.com (last visited May 21, 2019).
17/ According to DPMW, the walkway is optional because, in its words, "[n]o provision of pari-mutuel law compels the existence of a covered walkway between" the LGF and the SMB. Resp't PRO at 14. DPMW is technically correct in this regard, but only because section 551.114(4) does not allow these structures to be separated by a walkway, covered or not; rather, they must be "contiguous and connected to" each other. The other business about barriers such as roads and rivers is based upon the statutory definition of "contiguous" found in section 550.155(2)(b), which is so plainly distinguishable from
section 551.114(4) that the undersigned would not have addressed the matter, but for DPMW and Calder's heavy reliance thereon.
Section 550.155(2), as relevant, requires that a local government must approve a proposed capital improvement to a permitholder's pari-mutuel facility if the proposed improvement meets certain conditions, unless the local government can show that the improvement poses an immediate threat to health and safety. One of the conditions is:
(b) The improvement is contiguous to or within the existing pari-mutuel facility site. To be contiguous, the site of the improvement must share a sufficient common boundary with the present pari-mutuel facility to allow full and free access without crossing a public roadway, public waterway, or similar barrier.
§ 550.155(2)(b), Fla. Stat. (emphasis added).
Two points are clear. First, the contiguity requirement of section 550.155(2)(b) plainly does not come into play at all if
the improvement is within the existing pari-mutuel facility site——in other words, is an on-site improvement. Contrary to DPMW's argument, see Resp't PRO at 27, the mere fact that two improvements are located on the same parcel of land does not mean that they must (or even that they likely) "share a sufficient common boundary," and it certainly does not make them "contiguous." In any event, the "capital improvement" statute is clear: "contiguous to" OR "within."
Second, if the proposed improvement is not within the existing pari-mutuel facility site, then, obviously, it is without, i.e., located on another piece of property. In that event, section 550.155(2)(b) requires that the "site of the improvement," i.e., the piece of land that the improvement occupies, be contiguous to the "existing pari-mutuel facility site," i.e., the parcel occupied by the pari-mutuel facility. It is clearly these two parcels that must "share a sufficient common boundary," not the improvements themselves. The statute then makes clear that it is not sufficient for the parcels to be, e.g., across the street from one another.
The notion that the legislature meant "contiguous and connected" as used in section 551.114(4) to be understood as, essentially, "not separated by a road or river," is unbelievable. Obviously, the legislature did not intend that two buildings would be considered "contiguous and connected to" each other so long as they were both located on the same parcel and not on opposite sides of a road or river, because two buildings can easily satisfy these criteria without being either "contiguous" or "connected" as those words are used in everyday discourse. Indeed, it is a certainty that when, in rule 61D- 14.018(5), DPMW mandated that certain rooms in the LGF (or SMB, as the case may be) "shall be contiguous or adjacent," DPMW did not intend to suggest that rooms located on the same site and on the same side of the street would be compliant.
18/ DPMW argues that "connected to" means located on the same piece of property and thus "joined and/or linked together on all sides by land owned by" the permitholder. Resp't PRO at 29.
This contention must be rejected. Obviously, the legislature would NOT have written that the SMB "must be contiguous and connected to the" LGF, if it had meant only to require that the SMB be located "within the existing pari-mutuel facility site"——the latter idea being, as we have seen, one the legislature knows precisely how to articulate.
COPIES FURNISHED:
Bradford J. Beilly, Esquire Beilly and Strohsahl, P.A. 1144 Southeast Third Avenue
Fort Lauderdale, Florida 33316-1110 (eServed)
James A. Lewis, Esquire Department of Business and
Professional Regulation 2601 Blair Stone Road
Tallahassee, Florida 32399-2022 (eServed)
Wilbur E. Brewton, Esquire Kelly Brewton Plante, Esquire Brewton Plante, P.A.
215 South Monroe Street, Suite 825 Tallahassee, Florida 32301-1856 (eServed)
Ray Treadwell, General Counsel Office of the General Counsel Department of Business and
Professional Regulation Capital Commerce Center 2601 Blair Stone Road
Tallahassee, Florida 32399-2202 (eServed)
Louis Trombetta, Director Division of Pari-Mutuel Wagering Department of Business and
Professional Regulation 2601 Blair Stone Road
Tallahassee, Florida 32399-2202 (eServed)
Tamara S. Malvin, Esquire Akerman LLP
350 East Las Olas Boulevard, Suite 1600 Fort Lauderdale, Florida 33301 (eServed)
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 03, 2020 | Agency Final Order | |
| May 24, 2019 | Recommended Order | Respondent should deny the renewal of a licensee's slot machine gaming license because its slot machine gaming area is not "contiguous and connected to" its "live gaming facility" and therefore fails to conform to statutory requirements. |
